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The correct answer is option 1: 1 only.
Explanation:
1. The statement that the Bengali literary epic, Meghnad Badh Kabya, was written by Michael Madhusudan Dutta is correct. Michael Madhusudan Dutta, a prominent poet and playwright of Bengal, wrote this epic in 1861.
2. The statement that Meghnad Badh Kabya draws upon existing Hindu and Jain traditions of Ramayana is incorrect. Meghnad Badh Kabya is based on the Sanskrit epic Ramayana, but it does not specifically draw upon Hindu and Jain traditions.
3. The statement that Meghnad Badh Kabya was translated into Assamese and Hindi is not mentioned in the question and therefore cannot be determined as correct or incorrect.
In conclusion, only statement 1 is correct, while statements 2 and 3 are either incorrect or cannot be determined based on the information provided in the question.